Health Insurance Provider Turns to Crowdsourcing to Spark Innovation

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    Last week, I wrote about the concept of crowdsourcing innovation, having had the opportunity to speak with the chief technology officer of a company that specializes in bringing that concept to fruition. I found it to be a fascinating topic, and one that warrants further discussion—a discussion that can best be approached in the form of an equally fascinating case study.

    I had spoken with James Gardner, CTO of San Francisco-based Mindjet and of  Spigit, Mindjet’s innovation management software arm. The case study involves Cambia Health Solutions, a nonprofit health insurance provider in Portland, Ore., whose chief innovation officer, Mohan Nair, has adopted Spigit’s innovation crowdsourcing platform. I asked Gardner what it was about Cambia’s particular needs that were conducive to what Spigit has to offer, and he explained the background this way:

    By the time [Cambia] began to engage with us, they had already determined that crowds were a [resource] for them, and that they needed a tool to help them work with crowds. They built a custom solution on SharePoint to help them with that, so they were already in the frame of, “If we want to get innovation done, we have to involve other people.” But what we find when people have their own tools is they tend not to have the research data or the data science backgrounds that we’ve spent all these years investing in, and you get a number of common problems. The first problem that we most often see in these homegrown tools is herd behaviors in crowds. A herd behavior is where, if an idea is at the top of the list, it tends to stay at the top of the list just because most people see it at the top of the list. What you tend to get then is a popularity contest. In fact, we’ve shown statistically that in these kinds of homegrown systems, the chance your idea will win a particular challenge is directly related to how early you get the idea into the challenge. After the first round of these homegrown systems, people begin to question: “What’s the point of a crowd if the crowd isn’t giving me the best results?” That’s the point at which Cambia came to us—they realized that they needed something a bit more sophisticated.

    I asked Gardner what problems or challenges Spigit encountered that were unique to the Cambia case. He said Cambia is unique in that it’s innovating the business itself:

    Their strategy around restructuring the business and creating spinoffs and making transformational changes to the business is a little bit different from other companies. The reason they’re unique is their innovation focus has been around business design, more than around making a new product, or saving on a cost. They’re doing innovation around the business itself, as opposed to what the business does. They’re really very advanced in thinking about that.

    I subsequently had the opportunity to speak with Nair, who became Cambia’s chief innovation officer in 2010. He said when he took on the role, he had questions about what a chief innovation officer is, just like everyone else did:

    So I had to go away and kind of think about what this job meant to the corporation. As I looked at it, the senior leadership, of which I am a member, got together and discussed the values of the organization, and they listed innovation as a value, alongside leadership and teamwork and the other usual values you would expect. That forced me to really think about my role. What does it mean to be the chief value officer for innovation? How do I express that [in my role] as the organization’s lightning rod for innovation? Traditionally, if we had been an R&D unit or a lab, I would be the smartest guy in the room, with the longest beard, and I would not like to be annoyed by any processes, and I would hide with my really smart team. We would develop stuff and throw it over the transom for you to look at in awe with your mouth open. That would be the traditional model, and it works in some companies, where it is very viable. But why did the leadership team at Cambia put innovation as a value, as opposed to an objective? An objective would demand that I lock it away, and work to achieve it. But when they make it a value, then it defines it as a right and responsibility for all 5,000 employees in the company.

    Nair said when he thought about that, he felt the obligation to draw innovation out of every individual, just like he could draw ethics or teamwork or leadership out of every individual:

    The higher moral ground of our values had to be achieved. I then defined innovation as a number of ideas coming from the organization, with the number of igniters who will be generating those ideas as a measure. So I reported to the board that that’s how I was going to measure it—I was going to keep increasing the number of ideas collectively, and keep increasing the number of igniters who engage in idea generation. I credit Spigit as the tool of choice for being placed into my organization as a vehicle and channel to be able to throw in an idea, to engage and observe the idea, and to crowdsource that idea with others to optimize the result. I had requirements that were developed by my small team at that time, in terms of what we needed to see—being able to age ideas, being able to see ownership, and communicate those ideas to each other; and the ability to moderate those ideas. Spigit came out as the No. 1 choice.

    I asked Nair what needed to be in place at Cambia before Spigit’s technology could be effective—that is, what the cultural prerequisites were. He said a readiness has to be found in an organization:

    It’s a readiness among the leaders of the organization to allow people to put time into crowdsourcing. They have to also be examples of that themselves, and not every organization does that. Sometimes when Spigit is deployed, you see a lot of people in the lower ranks of the organization employ it, and middle management sometimes resists that. You also have to have employees who are willing to engage in idea generation—employees who are willing to share their ideas. So it took some pre-work on our part to excite the employees. I also had to declare that I was not the one coming up with the ideas. It took a while to get them to understand that they were responsible for the success of the office of the chief innovation officer. You do that through significant communication, and highlighting heroes who have succeeded, and giving awards to the winners, and having the CEO acknowledge people who come up with ideas. Those things are part and parcel of the energy necessary to make Spigit and the business process work together.

    You’ll recall Gardner had pointed out that the Cambia case was unique, in that it was creating spinoffs as part of the innovation process. Nair elaborated:

    We’ve started companies, which is not particularly well known in the world. It’s actually pretty unique—to have a small innovation team produce four startups that are fully funded in four years is pretty big news. Two of them were founded by us not through Spigit, but through the crowdsourcing energy that we had before Spigit arrived. One that I can allocate and assign to Spigit is really quite proprietary—it is in the area of pharmacy transparency. A pharmacist within our organization came up with an idea based on his research that he wanted to share, that could be of value to consumers. We found it to be pretty significant research, but it has never reached the hands of consumers. So through crowdsourcing, we took that idea and started to let the ball roll. The ball has rolled so far that we are now incubating a business that we will launch in about three months, with this very pharmacist in the middle of it. He was deep in the organizational structure, unknown to many, and he’s now a leader in the startup. That’s the power of Spigit, if allowed by the culture and business processes of a large organization.

    Nair wrapped up the conversation by addressing the philosophical difference between companies that “think” top-down, and those that don’t:

    They can sometimes manage top-down, but they have to think bottom-up. I believe very strongly that when you manage and think top-town, you lose the essence of why you hire people. Because they are closer to the problems—and to the solutions—than you can possibly be as a leader. If you bring that humility into technology and innovation, your employees can give you broad and new ideas, and execute on the vision that you have set for them.

    A contributing writer on IT management and career topics with IT Business Edge since 2009, Don Tennant began his technology journalism career in 1990 in Hong Kong, where he served as editor of the Hong Kong edition of Computerworld. After returning to the U.S. in 2000, he became Editor in Chief of the U.S. edition of Computerworld, and later assumed the editorial directorship of Computerworld and InfoWorld. Don was presented with the 2007 Timothy White Award for Editorial Integrity by American Business Media, and he is a recipient of the Jesse H. Neal National Business Journalism Award for editorial excellence in news coverage. Follow him on Twitter @dontennant.

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